FTSE holds its ground above 6,300 mark but no relief for travellers as sterling lurks at lowest level since 2011

The FTSE 100 index has continued to hover around the 6,300 mark today, a level not seen since before the financial crisis struck.

Sterling has also recovered very slightly against the euro, although the minimal gains will offer little relief to British holidaymakers suffering from poor exchange rates abroad.

Britain’s blue-chip index of leading shares had nudged up to 6,317.3 in mid-afternoon trading, slightly up from yesterday’s high of 6,311.26, which was the first time it had crossed the 6,300 threshold since May 2008.

Bullish: The FTSE hit a four-and-a-half year high again on Monday

This week’s gains mean the Footsie has
risen 6.7 per cent already this year and 79 per cent since its low of
3,512 in March 2009.

‘The benchmark is now 6.7 per cent
higher than where it started the year, which has caught even some of the
more bullish investors by surprise,’ said Angus Campbell, head of
market analysis at Capital Spreads.

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He added: ‘Since we’ve seen such
considerable strength in equity markets so far this year there’s bound
to be some resistance near the highs, but for those bullish investors
the only way is up.’

Confidence has returned to the
financial markets since the eurozone has stabilised, at least for now,
and the US avoided falling off the so-called ‘fiscal cliff’ of automatic
tax rises and spending cuts.

But the pound has endured an abysmal
start to the year amid fears it is losing its ‘safe haven’ status as the
economy heads towards recession.

Sterling crashed to its lowest level
for more than a year against the euro yesterday and to a five-month low
against the US dollar.

The pound has lost more than 5 per
cent of its value against the single currency since New Year’s Day,
putting it on course for its worst month since December 2008 in the
aftermath of the collapse of Lehman Brothers. Just earlier this month it was trading at €1.23.

The pound is up slightly against the dollar at $1.5757 in mid-afternoon trading, and against the euro at €1.1687.

William Poole, a strategist at currency broker FC Exchange, said: ‘The pound is truly having an abysmal start to the year.’

Roberto Mialich, a currency strategist
at UniCredit, added: ‘Economic reports out of the UK, especially the
GDP data, have not looked very encouraging. The pound is likely to
remain under pressure.’

It comes after incoming Bank of
England governor Mark Carney said central banks around the world had
further scope to stimulate economies.